Oil prices go down due to increasing US fuel inventories but was limited by OPEC production cuts

The prices of oil went down on Wednesday, as fuel inventories in the United States increased with the market considered it as a sign of low demand.

Futures for U.S. West Texas Intermediate lost 0.4 percent or 24 cents at $57.38 per barrel from the last previous settlement.

Futures for the global benchmark for oil prices, Brent crude, also went down by 0.4 percent or 24 cents and was at $62.62 per barrel.

The prices fell following the report from the American Petroleum Institute on Tuesday that showed gasoline stocks in the week ended December 1 have risen by 9.2 million barrels and an increase of 4.3 million barrels in stocks such as motor, diesel and heating oil according to traders.

Traders said the recent decrease of crude inventories by 5.5 million barrels were canceled out by the perception that the higher stocks of fuel hinted at low demand.

Analysts said that the on-going output cuts by OPEC and other non-OPEC producers including Russia have helped boost the prices of Brent crude by above 40 percent since the month of June and more than 130 percent since early 2016.

The prices of crude oil were well supported — said analysts — with the output cuts extended until the end of 2018.

The current rate of production in the US is the only factor that could impair the output cut agreement which is aiming to boost prices by cutting supplies which had increased by 15 percent since mid-2016 to 9.68 million barrels per day.

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